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     Last Sunday, the White House and Federal Reserve made moves to ensure the survival of both Fannie Mae and Freddie Mac in the midst of market uncertainty.

     Fannie and Freddie, in combination, finance about 50% of  homes in the U.S., equaling $5.2 trillion in owned or guaranteed mortgages.  Though it’s commonly assumed that the two are government agencies, in actuality they are government sponsored entities chartered by congress but owned by shareholders.          

     The details of the government’s plan are still being worked out, but the basics involve the Federal Reserve’s agreement to lend money to the two companies at a discounted rate, allowing them to borrow at the same rate it charges banks. 

     The Treasury Department is seeking authorization to increase the government’s credit line and buy more stock in both companies.  The current credit line limits are $2.25 billion each. 

     So far neither company has tapped the newly available funds, and many believe their original capital will sustain them without ever having to borrow.

    The gestures by the Treasury Department and Federal Reserve will come with a string attached—congress is being asked to grant the Federal Reserve a consultant status for the companies.  Through the Housing Rescue Package, currently moving through congress, the Treasury Department is seeking an even greater role for the Fed, moving to allow them to work in more of a side by side role with both Fannie and Freddie.

     This recent news is further indication that the market continues to change during this tumultuous period.  With the uncertainty of what rates will do, and changing guidelines, those who are considering buying would be well advised to secure financing sooner rather than later.

Low and behold the Dow Jones was up 1.2% and the TSX was down marginally with our major banks reversing early losses with upward movements between 2% - 4%. Looking at some of the US financials, they are up 50% from their lows just a week ago.

Sub-prime loan losses seem to be stabilizing although there is still weakness in home loans guaranteed by Fannie Mae and Freddie Mac.

The guys shorting financial stocks have been getting killed over the last few days and the pain of holding on. Oil stocks have been getting hurt as well as demand has been dropping. You can read my posts of last week on short covering of financials and "Buying Oil can be bad for your Health" as those themes continue into this week.

Dennis Gartman, who publishes The Gartman Letter and is followed by analysts and portfolio managers around the world is increasing his exposure to US stocks highly correlated to the index and is shorting oil with the belief that oil prices will continue their downward trend over the short-term.

Even some of the preferred shares I mentioned last week are up about 10% in just a few days as 7.25% bank backed investments are too attractive to ignore. What's next?

I haven't mentioned REIT's. The acronym stands for Real Estate Investment Trusts. I dont follow US or Global REIT's so my comments pertain to Canadian REITs. As an individual investor, it can be hard to diversify Real Estate holdings. By investing in a REIT, you get broad diversification in a portfolio of holdings, monthly distributions and preferrential tax treatment. REIT's have been trading well below their highs of a year ago. Most are trading well below their net asset value with sustainable distributions in the 7% - 11% range. Top tier names include Riocan, Primaris, and Boardwalk. Expect some smaller names to be taken over in the next 12 months as this sector moves back in favour. The beauty of REIT's as well is that you have complete liquidity with the ability to buy and sell a real estate portfolio in the open market on a daily basis.

What are your thoughts? Do you think REIT's have upward potential in the coming months?

"The problem we're trying to solve is where customers have been doing budgeting and planning in spreadsheets. As they grow into multiple units and change business models, that application doesn't scale too well," he said.

"No one is really satisfied when it's in Excel. Our customers want to be extremely collaborative and capture information and compare against actuals very rapidly in a way that synchronises across the organisation.

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HARARE, Zimbabwe (CNN) -- Zimbabwe's troubled central bank introduced $100 billion banknotes Saturday in a desperate bid to ease the recurrent cash shortages plaguing the inflation-ravaged economy.

A shopper displays a $500 million Zimbabwean bank note.

The bills officially come into circulation Monday, although they were on the foreign currency dealers market Saturday.

As high as they are, though, the bills still aren't enough to buy a loaf of bread. They can buy only four oranges.

The new note is equal to just one U.S. dollar.

Once-prosperous Zimbabwe has seen an unprecedented economic meltdown since it gained independence in 1980, with the official inflation rate now at 2.2 million percent.

Gideon Gono, governor of the Reserve Bank of Zimbabwe, said the new notes are for "the convenience of the banking public and corporate sector" in light of price hikes.

"The RBZ has noted with concern the unjustifiable and incessant general increases in prices of goods and services. It is therefore appealing to the business community to follow ethical business practices as well as take an interest in the plight of the general public," Gono said in a statement dated Friday.

Click to Read More.

By: Leland C. Abraham, Esq.

While many politicians and talk show hosts debate whether America is in a “recession,” one thing is for certain, more people are filing for bankruptcy now than ever. The growing hysteria generated from the subprime mortgage crisis where companies like Bear Stearns, IndyMac, Freddie Mac and Fannie Mae are being bailed out or regulated by the federal government is of daily discussion by news media.

Growing unemployment and increased gas prices have taken a toll on individuals and corporations as well. However, individuals and corporations do have legal options to deal with their worsening financial situation related to inability to pay their mortgage payment or looming credit card debt. Bankruptcy is a method that allows individuals or corporations to satisfy debts when they do not have the financial resources to cure claims with creditors. This article is intended to give you an overview of Bankruptcy as well as the pros and cons if you choose to pursue this legal option.

Bankruptcy is a legal process through which people and businesses can obtain a fresh financial start when they are in such financial difficulty that they can not repay their debts as agreed. Bankruptcy is created by federal statute; hence, jurisdiction for bankruptcy is under the federal courts.

There are four (4) different forms of bankruptcy applicable to consumers or individuals. Chapter 11 bankruptcy is a form of bankruptcy given to corporate entities for restructuring their business. When businesses become insolvent, corporations will file Chapter 11 bankruptcy to satisfy debts with creditors while still continuing to exist as a corporate entity after the filing of bankruptcy. For example, Michael Vick and his associated legitimate business ventures filed for Chapter 11 bankruptcy protection recently.

Chapter 12 bankruptcy is used for agricultural purposes. This form of bankruptcy is used for farmers and fishermen. If there is a supply quota that the farmer or fisherman must meet and circumstances arise where he or she is not able to meet the quota for a specified amount of periods, he or she may file for Chapter 12 bankruptcy protection to satisfy those creditors whom they are not able to provide supply for.

Chapter 13 bankruptcy allows individual consumers to make monthly payments to save possession and ownership of real or personal property. Like Chapter 11 bankruptcy, Chapter 13 bankruptcy is a form of debt reorganization. People file for Chapter 13 bankruptcy when they either have a single asset with a lot of equity or a number of small assets that yield a high net value. Usually, individuals will file for Chapter 13 bankruptcy if they would like to save their home from foreclosure. The person would use Chapter 13 bankruptcy to reorganize their debts and the person would make a monthly payment plan to pay off the debt of the bankruptcy estate in three (3) to five (5) years. For example, if an individual had $50,000 worth of debt and an average interest rate of 50%, the bankruptcy would reorganize that person’s debt to where the person may owe $44,000 and have an interest rate of 40%. That person would be expected to pay off the new balance of the debt through a monthly plan payment for either a three (3) or five (5) year period.

Chapter 7 bankruptcy is the most common bankruptcy for individuals or corporations. This form of bankruptcy is for individuals or corporations who have accumulated so much debt that debt counseling or debt management is really not an option for them. The Chapter 7 bankruptcy serves as a debt liquidation in which all of the applicant’s debts are discharged and the applicant is given a “fresh start.” If a corporation files for Chapter 7 bankruptcy, they will no longer exist as an entity.

There are several qualifications for the Chapter 7 bankruptcy. One such qualification is the median income qualifications. All individuals who wish to file for Chapter 7 bankruptcy have to fall within an income range. This income range will vary by state, but it usually is around $37,000 for a household of one. There are incremental increases to this income qualification the more people are in the household.

Another qualification to the Chapter 7 bankruptcy is the residency requirement. Generally, an applicant for Chapter 7 bankruptcy must live in the state in which he or she files for at least six (6) months. Although this is the residency requirement to file for Chapter 7 bankruptcy, there is a separate residency requirement in order to qualify for the state’s exemption laws. An exemption allows a debtor to protect an asset from being included in the bankruptcy estate to be distributed by the Chapter 7 trustee to creditors.
Advantages and Disadvantages
There are advantages to filing for bankruptcy. First, debtors can obtain a financial fresh start after they receive a discharge. For example, a debtor who files a Chapter 7 bankruptcy will be able to be discharged from paying most credit card debts. Second, creditor’s collection efforts will stop as soon as an individual or corporate debtor files for bankruptcy protection under a Chapter 7 or Chapter 13. This is known as the automatic stay. If a creditor continues to try to collect on a debt after receiving notice of a bankruptcy filing by a debtor, the creditor may be cited for contempt of court and/or ordered to pay damages. Also, you cannot be fired from your job solely because you filed for bankruptcy. Furthermore, you can freeze your FICO credit score by filing for bankruptcy.

However, there are disadvantages to filing for bankruptcy. Bankruptcy filing will remain on your credit record for up to ten (10) years. This record may affect future finance opportunities. So, it would behoove any potential applicant to not obtain any new credit cards or high interest loans after filing for bankruptcy for some time. But, research has given mixed results to the time when people or corporations can obtain new finance opportunities even after filing for bankruptcy.
Alternatives to Bankruptcy Filing

Another option that an individual or corporation might pursue is to directly contact the creditor and see if they are wiling to allow a lower monthly payment or extend the time to remit payment to lower the payments. Also, you can consolidate your debts by taking out a big loan to pay off all smaller amounts of debts that you owe.

If interested in filing for bankruptcy, please consult your local bankruptcy attorney in your area. We have provided a link to the National Association of Consumer Bankruptcy Attorneys for you to consult on this webpage as well.Legal Disclaimer: This site provides information about the law designed to keep readers informed of pertinent legal matters affecting the African-American community. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer in your specific location if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.

Twelve years ago, Julie Aigner-Clark was looking for a way to expose Aspen, her 18-month-old daughter, to music and the arts.

So she and her husband, Bill, shot a video in the basement of their home. "We borrowed equipment from a friend, put up a black velvet background and used the toys my daughter liked," she says.

The star of the video is a dragon puppet that Aspen used as a washcloth. Other scenes feature Julie's hand slowly turning the crank on a jack-in-the-box. It's all very low-budget but also quite soothing. Can you imagine the path to becoming a millionaire starting with such a mundane project?

Here at Kiplinger, we're old-fashioned. We think it's a lot more fun becoming rich than being born that way. Our culture and economy encourage risk-taking, pursuing good ideas and dogged determination. Luck plays a part, too.

There's no denying it. But you can also make your own luck through perseverance.

• Talk back: Could you become a millionaire?

To inspire you, we looked for people who have become rich. Just how did they do it? For some, like Julie and Bill, everything flowed quickly from one good idea. Others spent a working lifetime patiently building wealth.

More from MSN Money and Kiplinger

• To get rich, start saving in your 20s
• Turn $451 a month into a million bucks
• Getting rich is simpler than you think
• How 6 entrepreneurs made millions
• 7 ways to get rich by relaxing
• How to save a million at every age

We also asked what they've done with their wealth -- and what advice they have for others. We demonstrate how to find the cash to invest your way to millionaire status.

Look, we know it may not happen. But a growing number of Americans are achieving millionaire status. And in these eight stories, you'll find information to make your life richer, whether you become a millionaire or not.

8 millionaire profiles

The video that took on a life of its own: Julie Aigner-Clark and husband Bill learned about the power of word of mouth as their Baby Einstein empire took off.

Know when to make the call: Mark Wilson took the leap from managing a corporate call center to starting his own, Ryla Teleservices, providing a much-needed alternative to offshore outsourcing.

Pounce when the time is right: Real estate is an accessible path for independent investors to make money. Robert Norton, a former entertainment lawyer, shares his method.

It started over cocktails: The Internet has made many millionaires, but don't expect an overnight success story. Mediabistro's Laurel Touby reveals what it takes to make it big on the Net.

A 30-year plan to make a mil: So you'll never leap to start your own business and do not trust the real-estate market? You can still build a million the old-fashioned way -- just ask Gary Gardelli.

Breaking with family tradition: One of the first to produce eggs from cage-free hens, Cyd Szymanski can tell you it pays to go against convention when you believe in what you are doing.

Accumulating a fortune on $11 a hour: There's more than a money lesson behind Paul Navone's story of accumulated wealth from a wage-paying job.

Suddenly, it clicks: You don't have to go it alone. Gurtej Sandhu has earned his wealth creating patents at Micron Technology.

Millionaire lesson No. 1

Build a strong brand, and don't be afraid to promote your product with passion.

Julie Aigner-Clark and husband Bill's amateur video was such a hit with their daughter that Julie, 41, became determined to market what they called Baby Einstein to parents everywhere.

The couple invested about $15,000 of their own money in production and packaging and targeted Right Start, a small chain of baby-product stores, to be their distributor. Julie went to a toy trade show in New York City to try to find a buyer from the company.

Video on MSN Money

Paying for retirement
Your retirement could last for decades. Here are tips for living well during those years.

"I couldn't afford a booth," she says. "On the second day, I found a group of women from Right Start, and I attacked them because I was so excited."

The chain agreed to sell the video on a trial basis. "Parents would take it home, babies loved it, and there was amazing word of mouth," says Julie. (Some researchers question the effectiveness of such videos.)

She and Bill made more videos set to classical music and started raking in the money. Sales, which topped $100,000 in the first year, snowballed to $1 million in the second year, $4.5 million in the third, $12 million in the fourth and more than $20 million in year five.

Their production costs remained very low. "Duplicating videos is not very expensive," Julie says. Bill, whose background is in physics, eventually quit his job and became the firm's chief financial officer.

Julie Aigner-Clark

In 2001, the enterprise started to get bigger than the couple could handle by themselves. "It was taking a lot of time away from family," says Julie. So they contacted Disney, which bought Baby Einstein for more than $22 million.

Now Julie's back, partnering with John Walsh, the host of "America's Most Wanted," to produce "The Safe Side," a series of videos to teach kids about safety. And once again, she's cracked the kid code: What may look like a silly video to grown-ups is a big hit with the elementary-school set.

Meanwhile, the Clark family spends more time together at their Centennial, Colo., home. And in a few months, they'll leave for a yearlong trip around the world with Aspen, now 13, and little sister Sierra, 10.

Millionaire Lesson No. 2

Don't be afraid to go out on your own if you possess the competence and know people who can help you reach your goal.

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"For example, our salary survey this year also found that almost half of employees would accept a lower salary in return for flexible hours. By asking leaving employees what would have influenced them to stay, employers can find out what they can do to ensure remaining employees become more engaged."

Employers should think carefully about exit interviews to ensure they get useful information, says Alexander. They should never be carried out by the leaving employee's immediate boss - who may be part of the problem - and some organisations might employ a third party to carry them out.

Employees should also be asked open-ended questions, which allow them to say what they really think about the company culture and management, their actual job and even their relationship with colleagues and clients.

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Wertheimer is a member of the legal team that brought the case on behalf of Rep. Shays. The team was led by Charles G. Curtis, Jr. of the law firm Heller Erhman LLP.

“Today's ruling is yet another sharp repudiation of the FEC's continued failure to properly implement BCRA," according to Wertheimer. “The fact that it has taken more than six years and four court victories to make clear to the FEC that it cannot issue a coordination regulation contrary to law shows why we must have fundamental FEC reform."

“The FEC should conduct expeditious rulemaking proceedings and promptly issue new rules that fully and effectively implement the soft money ban in BCRA," Wertheimer said.

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According to responses to Parliamentary questions, one group, Atlanta-based Ambling International Consulting, has scooped three jobs within Works and Engineering, Tourism and Environment, claiming $460,000.

Mr. Richards claims Ambling was selected over at least four other locally based groups who bid for a contract to overhaul Planning Department procedures and legislation.

Local competitors only found out they had not won the contract, he said, when they received a survey from Ambling for their views on planning issues.

"The PLP Government appears to have abandoned its commitment to Bermudians first through a massive reliance on foreign experts," said Mr.

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The report also shows that one in every 501 U.S. households received a foreclosure filing during the month.

“June was the second straight month with more than a quarter million properties nationwide receiving foreclosure filings,” said James J. Saccacio, chief executive officer of RealtyTrac. “Foreclosure activity slipped 3 percent lower from the previous month, but the year-over-year increase of more than 50 percent indicates we have not yet reached the top of this foreclosure cycle. Bank repossessions, or REOs, continue to increase at a much faster pace than default notices or auction notices. REOs in June were up 171 percent from a year ago, while default notices were up 38 percent and auction notices were up 22 percent over the same time period.”

Nevada, California and Arizona continued to document the three highest state foreclosure rates in June.  Florida, Michigan, Ohio, Colorado, Georgia, Indiana and Utah were other states that made the top ten.

For the third month in a row, California and Florida cities accounted for nine out of the top 10 metropolitan foreclosure rates among the 230 metropolitan areas tracked in the report.

RealtyTrac noted that "Foreclosure filings were reported on 8,713 Nevada properties during the month, up nearly 85 percent from June 2007, and one in every 122 Nevada households received a foreclosure filing — more than four times the national average."

"One in every 192 California properties received a foreclosure filing in June, the nation’s second highest state foreclosure rate and 2.6 times the national average."

"One in every 201 Arizona properties received a foreclosure filing during the month, the nation’s third highest state foreclosure rate and nearly 2.5 times the national average. Foreclosure filings were reported on 12,950 Arizona properties, down less than 1 percent from the previous month but still up nearly 127 percent from June 2007."

"Foreclosure filings were reported on 68,666 California properties in June, down nearly 5 percent from the previous month but still up nearly 77 percent from June 2007. California’s total was highest among the states for the 18th consecutive month."

"Florida continued to register the nation’s second highest foreclosure total, with foreclosure filings reported on 40,351 properties in June — an increase of nearly 8 percent from the previous month and an increase of nearly 92 percent from June 2007. One in every 211 Florida properties received a foreclosure filing during the month, the nation’s fourth highest state foreclosure rate and 2.4 times the national average."

"Foreclosure filings were reported on 13,194 Ohio properties in June, the nation’s third highest state foreclosure total. Ohio’s foreclosure activity increased 7 percent from the previous month and 11 percent from June 2007. The state’s foreclosure rate ranked No. 6 among the 50 states. Other states in the top 10 for total properties with filings were Arizona, Michigan, Texas, Georgia, Nevada, Illinois and New York."

"Seven California metro areas were in the top 10, and the top three rates were in California: Stockton, with one in every 72 households receiving a foreclosure filing; Merced, withone in every 77 households receiving a foreclosure filing; and Modesto, with one in every 86 households receiving a foreclosure filing. Other California metro areas in the top 10 were Riverside-San Bernardino at No. 5; Vallejo-Fairfield at No. 7; Bakersfield at No. 8; and Salinas-Monterey at No. 10."

"The top metro foreclosure rate in Florida was once again posted by Cape Coral-Fort Myers, where one in every 91 households received a foreclosure filing — fourth highest among the nation’s metro foreclosure rates. The foreclosure rate in Fort Lauderdale, Fla., ranked No. 9. LasVegas continued to be the only city outside of California and Florida with a foreclosure rate ranking among the top 10. One in every 99 Las Vegas households received a foreclosure filing in June, more than five times the national average and No. 6 among the metro areas."

"Metro areas with foreclosure rates among the top 20 included Phoenix at No. 12, Detroit at No. 13, Miami at No. 15 and San Diego at No. 17"

RealtyTrac does not expect foreclosure activity to ease up until 2009.

Among the key findings of the latest report from Radar Logic:

• The broad housing slump continued as consumers showed persistent lack of confidence and difficulty in financing home purchases.
• April 2008 continued to exhibit price per square foot (PPSF) weakness compared to last year in almost all markets. One MSA showed net year-over-year PPSF appreciation, one was neutral, and 23 declined.
• The Manhattan Condo market showed a 3.6% increase in PPSF year-over-year coupled with an increase in recent transactions despite a modest decline of 0.7% in month-over-month prices.
• Charlotte’s increase of 1.5% in year-over-year PPSF moved its rank among the 25 MSAs to number 1. This represents an increase over the 0.1% year-over-year PPSF appreciation last month.
• Columbus showed year-over-year PPSF appreciation of 0.2% for April 2008, which is an increase from last month’s year-over-year decline of 4.3%.
• New York declined 3.0% year-over-year in April 2008, its second decline in Radar Logic’s published history (beginning in 2000).
• Sacramento, the lowest-ranking MSA, showed a 31.7% decline from April 2007, which is consistent with last month’s decline of 30.6%.

 The ten biggest declines in per-square-foot values from last year were in these markets:

Sacramento (-31.7%)

Las Vegas (-29.9%),

San Diego (-28.1%)

Phoenix (-25.6%).

Los Angeles/Orange County (-23.4%).

Miami (-22.4%).

St. Louis (-19.8%).

San Francisco (-19.7%).

Tampa (-16.6%).

Detroit (-16.1%).

You can read the full Radar Logic report here.

WASHINGTON - To prevent a repeat of the current mortgage mess, U.S. Federal Reserve Chairman Ben Bernanke said Tuesday that the central bank will issue new rules next week aimed at protecting future homebuyers from dubious lending practices.

The new rules will crack down on a range of shady lending practices that has burned many of the nation’s riskiest “subprime” borrowers — those with spotty credit or low incomes — who were hardest hit by the housing and credit debacles.

The housing, credit and financial crises have bruised the economy. Growth has slowed and employers have cut jobs every month so far this year.

In prepared remarks to a mortgage-lending forum in Arlington, Va., Bernanke said that “it is unrealistic to hope” that financial crises can be entirely eliminated, while maintaining an innovative financial system. “Nonetheless, recent experience has illustrated once again that financial instability can have serious economic costs,” he said.

Meanwhile, the Federal Reserve is also considering giving squeezed Wall Street firms more time to draw emergency loans directly from the central bank to help them overcome credit problems, Bernanke said.

In an extraordinary action, the Fed in March agreed to let investment houses go to the Fed — on a temporary basis — for a quick, overnight source of cash. Those loan privileges, which are supposed to last through mid-September, are similar to those permanently afforded to commercial banks for years.

“We are currently monitoring developments in financial markets closely and considering several options, including extending the duration of our facilities for primary dealers beyond year-end should the current unusual and exigent circumstances continue to prevail in dealer funding markets,” Bernanke said.

Click to read more.

Hedge Funds can provide this protection. There has been alot of negative press about Hegde Funds as some portfolio managers took excessive bets or leveraged their positions and blew up their funds in the process when they took the wrong side on a position.

Looking at multiple strategy funds is one way to diversify away some of the risk of downward markets as well as the risk of one manager taking an excessive position.  For example, one could look at Man Group which is that largest Hedge Fund manager in the world managing approximately $75 billion in hedge product. There first offering in Canada returned 25.9% over the 12 month period ending May 31, 2008 and has averaged 11.1% since inception.

It is prudent to look for strategies other than long only stock selection to provide returns and hedge funds can do this regardless of the attention the media has put forward relating to some of the bad apples in the industry. Your feedback whether it be questions relating to hedge funds or your views on the matter are more than welcome.

Lawmakers face a ticking clock to pass a legislative fix by June 30, or doctors who treat Medicare patients will face a nearly 11 percent pay cut -- seen as a highly unlikely outcome in an election year.

Senate Democrats, with some Republicans, want to preserve doctors' payments with money saved from cutting private Medicare plans, known as Medicare Advantage. A recent Medicare Payment Advisory Commission report said private plans are paid 13 percent to 17 percent more than standard Medicare.

"Every Medicare beneficiary in the country ... will pay $2 extra per month to subsidize these extra payment rates," Baucus said on the Senate floor on Wednesday. Continued...

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The firm's "Distressed Real Estate Initiative" will involve at least 16 core lawyers in ten offices throughout the country, including those in Mid-Atlantic and Western locations hardest hit by the housing bust and the mortgage crisis, including Los Angeles and Las Vegas.

The purpose of the section, according to the firm, will be "to provide representation in acquisition, restructuring and bankruptcy matters."

 "In this period of turmoil in the financial markets and economic uncertainty, new real estate opportunities and challenges present themselves," said Michael Sklaroff, chair of Ballard's Real Estate Department. "We stand ready to serve clients with respect to existing positions and also in assisting them in acquisitions and debt and equity investments in troubled projects."

Ballard Spahr Andrews & Ingersoll was founded in 1886 and now employs more than 550 lawyers in twelve offices located throughout the mid-Atlantic corridor and the western United States.

When there is blood in the water, the sharks will appear.

With the deal likely to go through, there will be alot of cash that retail and institutional investors will need to reallocate.  When the deal was announced last year, the general consensus was that Telus (T)would benefit once the deal was done and that can still very well be the case. Other companies that show good value include the cable company Cogeco (CCA) while Rogers an Shaw should see some funds their way as well.

A couple of yield ideas if you want to look outside of North America include Deutsche Telekom (DT) and France Telekom (FTE). Dt has a dvidend yield of 7.5% while FTE is currently yielding 7.7%

Where do you think BCE investors will allocate funds once the takeover is done or do you think the deal will still fall through?

Quarterly earnings next week are being reported by Cogeco and Corus Entertainment on July 9th, Astral Media on the 10th and Canwest Global on July 11th.

“In my opinion, Symantec is in the leaders quadrant and remains the only market leader because of our ability to execute and meet the present customer demands around managing email and unstructured information effectively, so discovery is quick and complete,” said Francis deSouza, senior vice president, Symantec Information Foundation, Compliance & Security Management. “Additionally, our customers rely on Symantec with confidence in our ability to look forward to how we’ll be able to meet their next archiving need in a market that is growing so fast.”

Gartner has reported that the email archiving software market grew 33 percent in 2007 to reach $376 million and is forecasting a compound annual growth rate of nearly 36 percent until it reaches $1.72 billion by 2012.

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The world's largest maker of corporate jets said it now expects second-quarter profit from continuing operations to come in the range of 93 cents to 98 cents per share. Previously it had forecast profit of 90 cents to $1 per share.

It said that loan-loss provisions at its finance arm would come to about $20 million in the quarter and that it would take a pretax charge of about $10 million related to a U.S. tax ruling.

Textron, which also makes products ranging from Bell helicopters to EZ-GO golf carts, maintained its full-year profit forecast of $3.80 to $4 per share, citing strong performances at its Cessna, Bell and military vehicle units.

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World Economy

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The last days of Bear Stearns

March 31, 2008

Robby Boyd/Fortune

You could detect a trace of fear in his voice. Mostly he seemed stunned. It was March 6, and one of Bear Stearns's top bond executives had dialed me up unprompted. The executive had dished about competitors in the past, but he had never initiated a discussion, much less one about his own firm. Now he explained that financial institutions that he dealt with - firms he had traded with for years - were suddenly asking him whether Bear had the cash to execute their trades.

Such news had yet to surface in the press, but the investment bank's shares had dropped nearly 20% in the previous ten days, and there were murmurs that short-sellers were circling. The executive asked whether I'd heard rumors of trouble, and he tried to preempt them. "We're making money," he said. "Our counterparties are getting paid, trades are clearing, business is picking up. It doesn't seem to be the likely scenario for an investment bank's collapse."

Ten days later Bear Stearns (BSC, Fortune 500) was swallowed by J.P. Morgan Chase (JPM, Fortune 500). But all the brouhaha over the deal - were the shares worth $2 or $10? should the Federal Reserve have intervened? - has obscured how astonishing Bear's collapse is. It's a reminder that in a business based on confidence, when that confidence evaporates, so does the business. A reconstruction of the week before Bear Stearns agreed to be funded, and then acquired, by J.P. Morgan Chase, reveals the speed at which Bear's longtime customers and counterparties lost their faith in the investment bank and undermined its ability to continue.

It also reveals a psychological gap. Bear had survived one liquidity challenge, in the summer of 2007, when two of its hedge funds cratered after the subprime mortgage collapse. The firm had labored to repair its balance sheet and improve its financing. "Our capital position is strong," said Bear's CFO, Sam Molinaro, at an investors' conference in February. "Balance-sheet liquidity has continued to improve throughout the course of the year. We spent an awful lot of time trying to reduce our higher-risk asset categories."

However much Bear Stearns saw itself as strengthened by its struggles, customers thought otherwise, and that hastened Bear's fall. Molinaro's comments notwithstanding, some had begun inching away months earlier. Bob Sloan, whose S3 Partners finances and advises hedge funds, says he counseled clients last summer to seek other prime brokers because he saw a "30% to 35% chance" that Bear would collapse. By March, Sloan's clients had pulled out $25 billion in assets. Others, of course, would desert only when the panic hit. And a few days would be all it took to show just how shallow the reservoir of trust for the firm was.

If there's one thing that companies hate to do, it's comment on rumors. Such statements, the thinking goes, only confer legitimacy on unfounded gossip. But there it was in a Bear press release on March 10: "There is absolutely no truth to the rumors of liquidity problems that circulated today in the market." At that moment, it appeared to be true. The firm had some $17 billion in cash. Of course, Bear was noted for its addiction to leverage even at a time when Wall Street, which runs on debt, was drunk on the stuff. Bear had $11.1 billion in tangible equity capital supporting $395 billion in assets, a leverage ratio of more than 35 to one. And its assets were less liquid than those of many of its competitors.

But by March 10, the problem had metastasized into something more dire than a rumor. Late the preceding Friday, a major bank - accounts differ on which - had rebuffed Bear's request for a short-term $2 billion loan. Such securities-backed repurchase (or "repo") loans are crucial for investment banks, which borrow and lend billions to fund their daily business. Being denied such a loan is the Wall Street equivalent of having your buddy refuse to front you $5 the day before payday. Bear executives scrambled and raised the money elsewhere. But the sign was unmistakable: Credit was drying up.

Confidence continued to ebb, and Bear again tried to reassure investors. "Why is this happening?" CFO Molinaro asked rhetorically on CNBC. "If I knew why it was happening, I would do something to address it." The rumors were "false," he said. "There is no liquidity crisis. No margin calls. It's nonsense."

Still, momentum was turning against the firm. That morning Goldman Sachs's credit derivatives group sent its hedge fund clients an e-mail announcing another blow. In previous weeks, banks such as Goldman had done a brisk business (for a handsome fee, of course) agreeing to stand in for institutions nervous, say, that Bear wouldn't be able to cough up its obligations on an interest rate swap. But on March 11, Goldman told clients it would no longer step in for them on Bear derivatives deals. (A Goldman spokesman asserts that the e-mail was not a categorical refusal.)

"I was astounded when I got the [Goldman] e-mail," says Kyle Bass of Hayman Capital. He had a colleague call Goldman to see if it was a mistake. "It wasn't," says Bass, who is a former Bear salesman. "Goldman told Wall Street that they were done with Bear, that there was [effectively] too much risk. That was the end for them."

It was ominous, but it wasn't yet the end. Bear continued absorbing blows. The cost of insuring $10 million in Bear debt via credit default swaps, which had hovered near $350,000 in the month before, shot past $1 million. By the end of March 11, the rate was irrelevant: Banks refused to issue any further credit protection on Bear's debt.

When word of the Goldman e-mail leaked out, the floodgates opened. Hedge funds and other clients, eventually running into the hundreds, began yanking their funds.

Dave Hendler, an analyst at research boutique CreditSights, called a Bear contact to find out what was going on. The contact said that all was fine. But then Hendler asked about a $4 billion credit facility due to expire in April. If Bear needed cash, Hendler reckoned, that was probably more than enough. Hendler says he was told that the facility had actually expired in February and several banks had backed out, reducing the credit line to $2.8 billion. Bear, he was told, was waiting until the release of its quarterly earnings to reveal the status of the loan. Neither Bear's liquidity nor its lenders' confidence, it appeared, was what it had seemed. (A firm spokesman declined to comment.)

Bear continued to maintain publicly that all was well. This time it was CEO Alan Schwartz - who hadn't seen the need to return to headquarters, and conducted the interview from Palm Beach - who went on CNBC. "We're not being made aware of anybody who is not taking our credit as a counterparty," he said, adding, "We don't see any pressure on our liquidity, let alone a liquidity crisis."

By March 13, the gravity of the situation had finally registered at Bear. Schwartz returned to New York and convened a meeting of the top leadership. Liquidity was plummeting; according to published reports, it had fallen to $2 billion at week's end. Desperate, Schwartz contacted J.P. Morgan CEO Jamie Dimon that evening.

Even as the firm frantically negotiated a rescue package, Bear executives continued to try to convince the world that everything was under control. That evening Schwartz contacted a well-known New York hedge fund manager (a longtime Bear prime brokerage client). He pleaded with the manager to appear on CNBC the next morning and express his confidence in Bear. The hedge fund manager declined politely but wondered why Bear needed a client to convince the world of its health. He wouldn't wonder long.

AT 9 A.M., Bear announced $30 billion in funding provided by J.P. Morgan and backstopped by the government. In a conference call Schwartz sounded as if he was still fighting reality. "Bear Stearns has been subject to a significant amount of rumor," he explained. "We attempted to try to provide some facts to the situation, but ... the rumors intensified." He said customer requests to cash out "accelerated yesterday ... [and] at the pace things were going, there could be continued liquidity demands that would outstrip our liquidity resources." The new loan facility, he said, would restore calm.

Of course, that didn't pan out. Bear's stock dropped nearly 40% in the first half-hour of trading. Within days, Bear's 85 years as an independent entity were at an end.

At Maggie's bar that Friday evening, directly across from Bear headquarters on 47th Street, the sense of shock was complete. A crowd of frazzled Bear employees thronged the bar. Some traders, clearly well past their first round at 6 P.M., expressed amazement at having to navigate camera crews to cross the street to the bar.

Soon after, I happened to sit next to a Bear Stearns managing director on the 6:35 express from Grand Central Station to Greenwich, Conn. "I worked eight years at a firm that promoted me from the back office to investment banking," he told me as he sipped a Budweiser tall boy. "I had thousands of shares and thought I could afford to send my kids to private schools and college. It's all gone now. I think I'll probably move to Pittsburgh, see if the Federal Home Loan Bank needs anybody."

REPORTER ASSOCIATE Doris Burke contributed to this article.

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